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United Over Brexit, EU Finance Ministers Argue Over Moonshine

(Bloomberg) -- European finance ministers took a break from weighty world affairs on Friday to clash over a more provincial topic: moonshine.

At issue is a 1992 European Union law governing taxes on specific goods including alcohol and tobacco that’s being updated to improve conditions for smaller producers. Ministers failed to agree on how much alcohol can be distilled at home -- a cherished tradition among farmers in many corners of the continent -- without being subject to these duties.

Several of them said health concerns made it impossible to agree to compromises tabled by the Romanian government, which holds the rotating EU presidency. One of the proposals foresaw an annual 50 liter-limit for most countries. Only Romania and Hungary would have been allowed to waive the tax for as much as 100 liters of fruit spirits.

“All of us have in mind that health is important for all the citizens in Europe,” Austrian Finance Minister Hartwig Loeger said at the meeting in Brussels. “On the other side, we realize that in many countries, also in Austria, it is a very long tradition,” and so a compromise must be found, he said.

Romanian finance minister Eugen Teodorovici already reminded his colleagues of what’s at stake when the topic was last discussed at a meeting in March. After distributing samples of Romanian brandy, he explained that “in the rural area, each family boasts a traditional homemade beverage from the fruits, harvested from their own households, and treasure it as agricultural jewels of the house.” Romania will continue to work on a solution, he said on Friday.

A restrictive agreement would have had the potential to stoke anti-EU sentiment ahead of the European Parliament elections next week. Intrusive regulation by Brussels bureaucrats has already become a topic in Austria, a country that’s been taken to task by the European Commission in the past for unilaterally exempting home-made fruit spirits from excise duties.